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tv   Street Signs  CNBC  November 20, 2014 2:00pm-3:01pm EST

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>> reporter: thank you so much. we've got to go. back to you guys at "power lunch." >> thank you very much, kate. as the hours have turned green here, sue, that will do it for this edition of "power lunch." >> yes, they have. we'll see whether or not the market can hold on to these very modest gains in the afternoon session. ty and i will see you tomorrow. have a great afternoon. "street signs" starts right now. ♪ that is the perfect open because the american recovery is winning the fight right now. huge economic reports powering stocks once again. i know we don't have huge gains, but the market continues to make all kinds of recorded. by the way, i'm not rocky balboa. i'm brian sullivan. welcome to "street signs." amanda drury, the numbers are beginning to get a little bit staggering. >> they really are staggering. >> yo, amanda. >> yo, my name is amanda, mandy drury. if the s&p managers close again
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above its five-day moving average, it will be the 25th consecutive trading day. so if we do that one more day, brian, it will be tied for the longest streak ever going back to 1960. and earlier today, as you can see, we went green courtesy of, yep, philadelphia. we got the best philly fed reading in 21 years. add that to upbeat existing home sales and you now have all three major averages on track for a fifth straight week of gains. >> and a big shout-out to jonathan krinski who's providing us with these daily stats. i don't think anybody else is talking about them. but that makes me think all the more that we are right. >> the question, of course, is what happens once you get to day 26? do we then go down? do we then break out? that, of course, remains to be seen. >> it does. and tomorrow could be the big day where we tie the longest streak, as you said, in more than 50 years. bottom line is this. because we say five-day moving average and maybe people's eyes roll back into their heads. the point is this. it's going to be one of the strongest short-term stock market rallies in the history of
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this god-given country. >> hallelujah, god bless america. okay, let's send it down to bob pisani at the new york stock exchange. okay, all these stats are fantast fantastic. good economic data coming out. i'm wondering whether or not the traders are starting to talk about whether or not we are getting overextended, bob. >> reporter: we are a little bit. and creeping higher a little bit every day. you guys hit on all the right notes. take a look at the markets today. number one, great economic data here from a philly fed and also existing home sales. and all the growth sectors are up. tech, all the right stuff is up today. the markets are acknowledging the good economic data. you're right, we're at record highs but we're extended. what does that word mean, "extended"? 2051 or 2052. the 50-day moving average is 1978. we're 70 points away from the 50-day moving average. that's a lot. that's statistically significant. that's when i mean when i say
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extended. when you get that far away from statistical averages, the market tends to pull back a little bit. that's what i'm probably looking for in the next week or so. energy is a market leader. finally we're getting stability in energy. that's because oil is stabilizing around $74. i don't know if that's going to last. but it's certainly been a real major reason why we've been able to creep up a little bit in the last few days. energy sector stabilizing. guys, back to you. >> bob as a philly guy, did you appreciate that open? >> reporter: i did. you know, it's hard to say that it's statistically significant, the philly fed is really great every day. the markets necessarily are up, but those kinds of small numbers, local manufacturing numbers, are what a lot of traders pay a lot of attention to. >> i meant the "rocky" theme, but i'll take your excellent -- >> i know. i got that at the top. >> thank you very much. appreciate it. let's get more now. jim paulson is chief investment strategist with wells capital management. all right, jim, more great economic data, but the question, i guess, is is all the good news that we've gotten lately already priced in or maybe more than priced in to this stock market?
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>> yeah. you know, brian, while i'm still a longer-term bull, i think we've got several more years and the market's probably going to be quite a bit higher at some point than it is today. i just think near term, we probably are headed for a little more turbulence again. i don't know if we've gone through that. i guess there's three things that kind of bother me. and you sort of alluded to at least to one of them. i think that, you know, we have had a 50% increase in the stock market's price earnings multiple in three years from 12 to 18 times earnings. that's a big increase. we're at relatively high levels as well. at the same time, i think you could argue today that while investment sentiment might not be, you know, giddy optimistic like it was in the late '90s, it's certainly probably more calm and confident than it's been at any other time in this recovery. and thereby, you know, subject to some unrest if something odd happens. and then finally, we still got to face and are going to face in
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the next few months the big challenge for the market, which is going to be the resetting of interest rates in this country, the reconnection of those interest rates back to the economic cycle after pricing the yields for fear, basically, we're going to reprice it to an economy now growing at 3% with near full employment conditions. >> right. >> and i this i rates have got to come up. and i think that's going to be a challenge for the stock market in the next several months. >> yeah. it certainly feels like at the moment some of the strength in the u.s. market is built on three basic assumptions. number one, the u.s. is the place to be, maybe the only place to be at the moment. number two, u.s. dollar is king. and number three, that rates will be lower for longer. what you call basically consensus themes on wall street. to what degree will those consensus themes be turned on their head going into the new year? >> you know, mandy, i think that i would tilt the portfolio right now against every one of those. i think that they're all very strong wall street themes. there's so many people betting
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on them. i think there's a good chance every one of those gets disappointed in 2015. you know, i personally like an overweight international markets right now. they've all underperformed the united states market in the last couple years. you've got policy officials in europe and japan and even the emerging world working hard to prop up those markets where the policy officials here are moving away. you've got a big valuation difference. you can buy the emerging world for about 12 times earnings. you've got to pay 18 times earnings here. and i think, personally, the dollar is going to weaken next year rather than strengthen. i think what draghi and abenomics is doing, if they're successful in bouncing those recoveries, that's going to bring a bid to the euro and the yen. and if the fed waits too long and then has to tighten under somewhat panicked conditions, i think that will bring a sell to the dollar. so i do think that some of those tilts, i'd move away from the u.s. i'd bet on a weaker dollar. he federal reserve is ng to find
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going to, once they do begin raising rates, are going to have to raise them more aggressively. >> i got a report from a guy named james w. paulsen, ph.d. not sure who that is. here's what he writes. the stock market has usually struggled during stages of most monetary-tightening sake iningi. do you believe look out below? >> i do to some extent. i did a chart where i overlaid the fed fund's interest rate on top of the stock market's price earnings multiple, and they are closely related, brian. what i have found is that when the fed does initiate post-war tightening cycles, at least for a period, "p" mobiles contract. most know seems to expect that next year at some point the fed will begin raising rates. if most everyone expects that, then you should also expect that the price earnings multiple is going to contract next year. and i don't think as many people expect that. and unless earnings rise enough
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to offset a declining price earnings multiple, we're probably got some odds yet of a correction yet in 2015. you know, we could still end the year higher, but we, rather than going to 2150 or 2200 first, we might have to revisit 1800. and i think that could be a very likely prospect as we head into 2015. >> and you're looking for the first rate hike in spring of next year. jim paulsen otherwise known as james w. paulsen phd, thank you very much for joining us. >> thank you guys. all right. we've got big news right now on the bond king. let's get down to scott wapner. >> at least one of the bond kings. bill gross is getting a lot more money to play with courtesy of soros fund management in which george soros is still the chairman. they're giving him $500 million that he will manage in an account over at janus which will be separate from the unconstrained fund which is what bill gross currently manages over there. so a lot more money for mr. gross to keep his eye on. it is worth noting, too, since
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bill gross joined janus, the unconstrained fund, again, separate from this specific money related to mr. soros, has $442 million in assets as of the end of october. when mr. gross went to janus, it only had $13 million. you see the impact he's had on janus, on the unconstrained fund and now on this other vehicle which gross will manage to the tune of some $500 million. brian? mandy? >> thank you very much for the news alert. scott wapner. now, if you were pulling up at the pump right now, i have some really good news for you. gas prices shaved off another penny overnight, bringing the national average to $2.85 a gallon. that is down from $3.11 a month ago. so how many days have we now enjoyed falling prices, brian? >> a lot. >> 56. >> that's a lot. >> that's a lot. all right. so it may be cheaper to fill up your car lately, but it may also be more expensive to heat your home. while gasoline prices have been
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dropping, natural gas prices have been soaring. in fact, up about 20% just this month. raymond james senior vice president energy analyst joining us now. are you going to tell us, pavel, that it's just the cold weather, or is there something else causing the big run in nat gas? >> i'm sorry, it's just the cold weather. you know, the only people that have a worse track record than equity analysts are weather forecasters. so i'm not going to try to predict the near-term weather for you, but i will say we think natural gas prices domestically will average lower in 2015 than they have in 2014. so they're currently about 4 bucks. we think they're going to average about $3.75 next year, down from, again, from current year levels. and you know, when weather warms up, which it will eventually, we'll see a correction. it's as simple as that. >> that's looking a little further into the future, isn't it, into 2015. pavel, in the meantime, we had a
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bigger than expected decline in nat gas inventories. i don't know about you, it's pretty cold out there in most of the country and probably going to get even colder in the next week. we could see further declines in inventories. what do you think's going to happen over the next few weeks? >> look, we saw this exact same movie a year ago in december of 2013 and then january, february of this year. we saw natural gas futures touch, you know, 5 bucks in mcf, a lot higher than where they are today, but they only stayed there for a matter of weeks, right? when seasonality reverses, which, again, it will eventually, prices are going to come back down. so i can't give you a weather forecast, unfortunately. but i have a very hard time seeing gas prices this winter getting as high as they were a year ago which, again, is about 5 bucks. >> i will say this, though, pavel. if we go back in time, natural gas has been relatively stable for the better part of five years. $1.73 was a low, but that was brief. 6 bucks was the high, but that
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was brief. we've been in a range. so tell us, with that in mind, how do we make money if we decide that trading natural gas futures is for us? >> that's a tough game to play. i mean, clearly, you have to make a weather call in the short run. you know, if you think that the winter will be as cold as the one last time, then, you know, there probably will be some more gains to come. on the other hand, if we get back several years when we've had a string of warmer than trend winters, then obviously the, you know, prices will fall quicker and sharper. but in general, you are right. natural gas has been in a trading range. by the way, huge difference compared to what's been happening in europe and asia. in asia, the price of lng is down 30% along with crude in the last three months. >> maybe a little easier than trading natural gas futures for the moment pops at home in the same way that crude prices or
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jet fuel prices go down, airline stocks go up. is there a comparable trade when natural gas prices go up? there are any particular plays that they can put in the stock market that would make them money? >> well, i mean, there are some gas-weighted emp companies naturally that will do well, but again, the stocks really do not track the spot price so much as the 12-month futures curve or even the 24-month futures curve. markets forward looking and a lot of companies, frankly, are hedged. there's always the seasonal trade. it's very pronounced in the commodity itself. but it really does not play nearly as much in the gas stocks. >> all right. pavel, thank you very much, buddy. we appreciate it. we'll see you again soon. >> thanks. all right. so we led with "rocky" at the top of the show. coming up, we're going to talk retailers. why the big-box stores, some of them, are spreading the christmas cheer earlier? plus, "the daily show" has a little fun with us.
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>> why not? we're so much fun to have fun with. but first, it is the return of our famous mystery chart. but today we're going to be switching things up, aren't we, brian? we're going to be telling you the name of the company. you tell us the return. this is a chart of mr. softy, microsoft, since its ipo in march of 1986. so can you guess how much it has gained since then? tweet us your thoughts. we'll tell you the answer. and why today's a really big milestone for microsoft when "street signs" returns. ameriprise asked people a simple question:
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welcome back to "street signs." i'm bertha coombs. officials in the obama administration walking back numbers for obamacare plan enrollment for 2014. at a recent hearing, officials said that that number now stood at about 7.1 million. 7 million, the target that the congressional budget office had set for final enrollment. after some queries from reporters and a number of reports, today officials are admitting to cnbc and others that they made a mistake, they say. they included some 400,000 dental plants in those numbers, and the actual enrollment number is 6.7 million.
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that issue right now very much top of mind on twitter among the health care press and among a lot of folks in washington, as you can imagine. >> i certainly can imagine. thank you very much, bertha coombs. cheers of best buy, the biggest percentage gainer on the s&p 500 today. after seven quarters of decline, the country's larger consumer electronics retailer finally saw revenue increase. its results were better than expected helped by cost cutting. year to date, though, still lower by almost 5%, brian. meantime, the retailers have been on fire. this is a crucial time, obviously, of the year for all of them. check out some of the same-store sales numbers we've seen roll out recently. best buy, up 2.4% year over year. target and walmart, also had higher sales than one year ago. and those strong numbers have been good for their stocks. best buy is up 10% so far this month. target up 15%. walmart up 10% as well. the question is this. will the retailers keep doing well into the holiday season? david schick, retail analyst at
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steeple nicholas joining us now. i guess for our viewers and listeners saying dang, i missed it, is it too late? they probably didn't say dang. >> yeah. whatever they said, i think that we have to realize the forces at work that are having the third quarter look a little bit better aren't likely to reverse in the short term. now, there's a lot of things that happened in the second half of last year. some of which are structural and still there, which is the migration, obviously, to online shopping. but expectations for what retailers can do have fallen because business has been bad for a long time, as retailers have struggled to grasp that. but separately, holiday season last year. you had six fewer days than you did in 2012. you had incredibly adverse weather. and the retail industry, i think, was unprepared for what internet was going to do to their business model. this year it is different. you don't like saying it's different this time in the analysts business, but gas prices are a huge break. we don't have that adverse day loss, the six-day loss.
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retailers are taking it very seriously. something you're seeing today with the best buy numbers and target earlier this week, the omni channel component is really helping. so we think a number of those pressures last year are reversing a bit. it's not structural as much as sort of a temporal advantage that they have. >> i hate being so binary and simplistic in asking who are the winners and losers in terms of the retail stocks going into the holiday season, but who are the winners and the losers going to be? >> right. you mentioned two. we'll talk about best buy and target, if you like. target had a number of things that we think they had underinvested in and perhaps ignored competitively. that led to a huge set of deceleration pressures on their model. and pressure that along with the general macro in canada as well. we talked a couple weeks ago, not on your show but on an earlier in the day show about reasons we were getting more optimistic on target.
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i think you saw that in the third quarter. not only that, you saw how the stock reacted. there's -- that's a name, target, where there's still a lot of doubts. you know, can they control their own destiny? we think they'll appear again at least in the near term optically like they figured a lot of this stuff out so we continue to like target here. best buy today, another one showing you not only that they can control their business a little bit better, it was the best comp in 4 1/2 years from best buy today. you're also seeing where expectations are. so those are two we'd focus on. >> who stinks? >> that's the holiday season. let's talk about what we like. >> well, you just talked about the bob crachetts. are there any jacob marleys? they don't have to stink. maybe they've had their runs. they're good companies but they're just not worth our viewers' money. >> i'll tell you what, brian. i'll put it a different way. i think early this year, something we talked about in our outlook piece for 2014 was it
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should be a tough year for retail, if you want to talk about different characters. that was going to be -- that was going to be a problem, you know, try to think of a dekeynesian title to use like "great expectations." >> you're getting a segment in on "oliver twist." becoming a blue house. >> it was a twist. as we work through it, it looked like the fall could be quite interesting. why? lapping all those factors that hurt first quarter -- fourth quarter last year. second, the expectations got reset. so i really think rather than take a negative point of view, i think you have to say it's been right to be negative on retail structurally as an industry. >> right. >> from an interest rate cyclically, and it's less so. >> and that glass you've got in front of you, it's definitely half full, isn't it, david? you're a glass half full kind of guy. >> his glass is nine-eighths full. >> it really is. >> this time of year, yeah. >> it's the tale of one city. all right. >> the good city.
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today, cnbc announced a partnership with kensho. so what is kensho? well, it's a company that tapped big data to answer complex financial questions like how often have we had a santa claus rally in the last 50 years? questions that may take time and poring over charts for us to figure out, but just seconds using big data. melissa lee is here to explain more. this could be transformational. >> absolutely. and certainly puts in the hands of the smaller guy watching the advantage that a lot of institutions have already in terms of looking at how correlated things are, how certain sectors react on certain events. for instance, what happens to financials around the time of the fomc meeting? these are all things we can do pretty easily with kensho. i just want to pull up an example i did for you guys. you were talking about retail, about gas prices. so i took a look at gas shock. so what happens when there's a sudden gas drop as we have seen? so i did a search here. when our bob drops by more than 25% over 20 days, which is one
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month's worth of trading, this happened 16 times since 1980. so the question here is what happens in the next month of trading to the retail stocks and which components in the xrt performed the best? take a look because these are some names that might surprise you. children's place. there were ten occurrences of this happening since 1980. up 20%. priceline up 19%, just about, and gas is up by 16.25%. those are the best performers when there's a sudden drop. i also did the flip side. what happens when there's a sudden gas shock to the upside? what happens when rbob gasoline rises by more than 25% over a one-month period? how does a consumer react? and which stocks in the retail sector seem to fare the best under those circumstances? these names will also surprise you most likely. priceline. up 7%. netflix, up 7%. ch ch chico's, up 6%. >> i know bob pisani has been doing a lot of discussion on kenshow. one of the issues he raised is
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why has wall street been so slow for introducing this to the masses. >> because they don't have in interest in doing so. they're big firms. they don't want to share their threats. >> knowy you're not going to go out there and say i'm going to put on a trade, be faced on this one screen, but this is another way of generating trade ideas that you can then go research. ideas that might not otherwise come up because you can actually go in there and say you know what? i want to see what happens in gas. i could have done it for 10%. i could have done it for 15%. but this is what i found was statistically most important in terms of number of occurrences and the reliability of the data. >> so we're going to have access to this powerful tool. zoo exactly. i've been -- you know, i've had the pleasure and the privilege of having a sneak peek over the past couple weeks. so i've been -- >> what is it, a robot or something? just a computer? you type stuff in? like a fortune teller? how does it work? >> there's an interface and you can do different searches. there's a price trigger
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analysis. what happens when a certain stock or certain commodity does "x," you know, moves "x" points or "x" points within a certain time frame, what happens to another asset class over "x" number of days? >> so what would be your first question to kensho? >> you talk about it like it's a person. >> i want kensho to be real. >> you want kensho to be your friend. >> my first question, dear kensho, what is to prevent this tool from melissa lee from taking over the world now that you contain all the power? >> it's only as good as the search that you put into it. >> ah. >> you do have to take a look at the results because some results are not statistically important. >> do us a favor. can you promise us something on national tv? >> what is it? i can't promise. >> use your power for good, not evil. >> kensho, by the way, means enlightenment in japanese. >> not bad. >> this is all about enlightening. >> it is about empowering the average investor, leveling the playing field is what it's all about. thank you very much. i want to meet kensho. thank you. >> swing by my desk. >> i'm imagining a cute little japanese robot.
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president obama expected to make a big move on immigration in a primetime speech tonight. but why this is a big deal for business, not just politics ahead. and last call for today's mystery chart. this is a chart of microsoft since its ipo in march 1986. so can you guess how much it's gained since then? @sullyc @sullycnbc,@mandycnbc. the answer after this quick break. i'll just do it myself. useless. that's nice. set's the mood. have your entire house within reach, even when your devices aren't. introducing relay by wink it's like a robot butler, but not as awkward.
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okay, let's pull up the mystery chart one last time. microsoft, we asked you how much it's up since its ipo on march 13th, 1986. the answer is 40,341%. why are we showing you this? today is a landmark day, isn't it. on this day in 1985, the first version of microsoft's windows operating system, 1.0 was released. president obama expected to announce new action on immigration in a primetime address tonight. and what the president says this evening could have huge impact on the business community.
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cnbc's deana guzofsky is here to explain. >> the business community is concerned about a number of things. first you have the employers. they are wondering whether they'll be actually be able to retire and retain top talent from other countries. i mean, we're talking about people who have highly specialized degrees and skills. you've got the engineers, the phds, they want to be here in the united states to either start their own companies or work for another company. and of course, let's not forget about the investors. we spoke with trevor klein, a guy who sold his company, autoanything.com to autozone a few years ago for $150 million. right now he's out in san diego investing in a company called tv page that uses a technology created by an immigrant from the netherlands that lets retailers sell products through videos. but the big problem is the guy behind the technology, get this, he could very well be deported at the end of the month. his current j-1 visa is about to expire, and he wasn't even
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considered for a worker's visa. take a listen to what trevor had to say about that. >> i don't see why we should be limited -- we should stifle our growth by not being able to onboard the right resources who can fulfill these demanding positions. and frankly, we're looking for the creme de la creme that are going to add significant benefit to the american economy. >> about $3 million has been invested in that company to date. so the debate really becomes let's look at the people who we're trying to keep in this country and some of those like the investors, big companies who feel that they are being overlooked in this process. >> dina, it was a real pleasure to have you on. thank you very much. big speech tonight. >> thank you. >> all right, a small-cap stock that won big wall street firms fees rising 50%. that and more ahead in "street talk." forget the feds, now individual states are going after gm for alleged cover-ups and recall scandals. it is the first state to do so.
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it is arizona. and that state's attorney general will be joining us live. stay with us on "street signs." e financial noise financial noise financial noise
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i'm just looking over the company bills.up? is that what we pay for internet? yup. dsl is about 90 bucks a month. that's funny, for that price with comcast business, i think you get like 50 megabits. wow that's fast. personally, i prefer a slow internet. there is something about the sweet meditative glow of a loading website. don't listen to the naysayer. switch to comcast business today and get 50 megabits per second for $89.95. comcast business. built for business. welcome back to "street
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talk." i'm mandy drury with brian sullivan. analysts' stocks you need to know about today. let's start on an up note. janney upgrading yum brands to a buy. >> the stock is up 2%. their target is 88 bucks, but they say the stock could go to $100 or more if no big quote shoes drop. they're talking more about problems in china. the downside risk appears to be about 60 bucks and said maybe yum could use a chinese tracking stock. bullish on yum. next, deutsche bank initiating coverage on mole global. this could be our under-the-radar name of the day, but it's not. >> yes, it's not. so it is a malaysian-based online payment company. basically mol stands for money online. this is owned by billionaire vincent tan, one of the richest guys in malaysia. they recently went public. deutsche bank, the only analyst out yet with a rating. they got a buy and a $12 target that implies about 40 to 45% upside. it was 50 this morning but the stock is up big today. so deutsche bank pushing mol
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global again, though, they're the only analysts in america so far out. so just be careful. >> they have offices all around the world. >> you know vincent tan, a well-known guy in southeast asia, one of the richest guys. stk number four, tru car. >> rbc upgrading to an outperform. about 20% upside. ace raising price target to 23 on tru car. revenue better than expected. the real under-the-radar name is ticker cgnx. >> yeah, never heard of them. that's why we do this. massachusetts-based technical instrument maker. they make things like giant bar code scanners for warehouses. c canaccord starting with a buy. about 20% upside on cgnx. now to "talking numbers." that is, of course, our daily look at a stock from both a fundamental and a technical perspective. today that stock is jetblue. the airline. ari wauld of oppenheimer on the technicals. david seeburg, cowan and company on the fundamentals.
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ari, how does jblu look to you? >> brian, they say the trend is your friend. and for jetblue, that trend is higher. i think the stock's going higher. looking back at the chart, here's what i'm seeing. it's done a great job respecting its rising 200-day moving average. i think through this uptrend over the past few years, you have a tremendous amount of momentum behind it. i think it continues to carry shares higher. looking to the upside, we're getting back to levels from '04, '05, '06. resistance range. starts at 1350, extends to 1550. pushing up to the lower end. aside from near-term consolidation which i think ends up being a buying opportunity, i think we hit the upper end of that range. i think we're going to 1550. >> do you think as well that the uptrend here is your friend? >> no question. i think ari and i again are in 100% agreement. the news that came out about changes in the pricing and the model, it's priced into the stock. and i think people have viewed this as a very positive event that was coming up. again, that catalyst priced in. long term, i think it's going a lot higher.
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let me outline it for you. helene becker, our cowan airline analyst, she nailed this back in august when she upgraded the stock. she cited exactly what was going to happen. what happened recently is being the catalyst to take this stock a lot higher. so what happened? we saw the street sort of ratchet their numbers. they started to chase or erase numbers. this became a catalyst-driven stock. it's really a show-me story from management's perspective. so look. i think the industry fundamentals are extremely solid. they've got that as a tailwind. and i think the stock's going to go a lot higher long term. we've got a $15 price target here. i wouldn't be surprised if it got there by the end of the year. again, industry fundamentals really supporting this story. and i think there's a lot more runway here. >> a lot more runway. come on. you can do better than that. >> give him a break. >> i had to throw it in there. >> how about blue skies ahead? >> that's good, too. good job, though, david. you gave credit to helene becker who's been on the show as well. >> have to.
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>> you did the right thing, my friend. i sounded like i'm from new jersey just then. oh, my god. thank you, guys. >> thank you so much. david, ari. be sure to check out the online edition of "talking numbers" in partnership with yahoo! finance. why is arizona, the state, suing general motors all by itself? well, the attorney general of that state will join us. he will explain why they are suing gm because of that recall scandal. and then later on, another day, another gourmet hamburger chain goes public. have we reached peak burger? we'll talking live to the ceo of the latest hamburger restaurant ipo. stay with us. [ male announcer ] your love for trading never stops. so if you get a trade idea about, say, organic food stocks, schwab can help. with a trading specialist just a tap away. what's on your mind, lisa? i'd like to talk about a trade idea. let's hear it. [ male announcer ] see how schwab can help light a way forward. so you can make your move, wherever you are. and start working on your next big idea.
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yoare you kidding me?oo? everybody's on woo-woo! [elevator bell rings] woo-woo? lock and load, people! we're going all in on woo-woo! ok? mark! comp us up a profile page! copy! susie! write us some posts! ready! grace! upload some videos! uploading! i want sponsored woos. i want targeted woos. we want to be all up in your woo-woo feeds! gordon! register our woo-woo handle! janice?! we need an ethnically ambiguous woo-woo mascot. we're cashing in the q4 budget, people, and we're buyin' some followers! hahaha! yeah! [applause] woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! oh yeah! [laughing] dude. are you still on woo-woo? naaaahh, man, my mom's on woo-woo.
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♪ the state of arizona is suing general motors, claiming the state says that gm hid safety defects to avoid the cost of recall. now, the suit could cost gm as much as $3 billion. because arizona law calls for penalties up to $10,000 per violation, and there are hundreds of thousands of alleged violations. now, gm is saying in a statement, quote, we have reviewed the complaint filed by the state of arizona. it misrepresents the facts, the performance of our vehicles and our work to ensure the safety of our customers. we intend to vigorously defend
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ourselves. joining us now from phoenix is arizona attorney general tom horn. attorney general horn, thank you for joining us. why did you decide to press ahead with this lawsuit? >> it's good to be with you. well, a law firm brought us the facts of this case several months ago. i had lawyers in my office analyze it. they concluded it was a valid case. in a lot of cases when someone brings us a case like this, they'll say no, we shouldn't pursue it. but this one they said we should. if you look at the complaint, it's over 100 pages. it has an awful lot of detail in it starting at page 35, it has details about cases where cars went off the road and people were killed or seriously injured. the first one was a 16-year-old girl named amber back in 2005. and each one of those is a real tragedy for the family, if they lose a loved one, for the individual if they have to live with pain the rest of their life or they're disabled.
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having safe cars is a very serious responsibility. and discovering problems entails a very serious responsibility of disclosure. the facts set out in that complaint, which as i say, is more than 100 pages, show that that was not done. so it was my duty as the attorney general to bring an action. >> and you'll forgive me, attorney general, i have not had the chance to read the entire complaint, so my apologies, but i will ask this and you can answer it for our viewers. there are accidents, and there is negligence. have you or is that complaint alleging any cover-up or willful negligence on the part of gm? >> yes. failure to disclose that they had a lot of information about the problems and did not disclose them to the public. so yes, we definitely are alleging what you could call a cover-up or a failure to disclose. >> do you think this is going to open the floodgates to further lawsuits? for example, do you think there will be other states who follow in your footsteps? >> you know, it's hard for me to predict what other states might do. my obligation is to the people of arizona.
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and i'm trying to fulfill that duty. >> would you settle? >> yes. every case has a number at which it should be settled. i was -- before i became attorney general, i litigated for over 30 years, and i always believe that if you can settle a case, you should. >> do you have a general number in mind? >> i do not, no. i leave office to go back to private practice january 5. and my successor will have to decide that. >> attorney general horne, thank you very much for speaking with us. >> good to be with you. thank you. all right. we're proud to say that last night we made "the daily show" again! we're going to show you the funny clip in just a few minutes. but next, a high-end burger chain just went public today, and we ask how many burger chains can america handle? have we reached peak burger? well, we've got a very special report with both jane wells and the ceo of the newly public restaurant in a first on cnbc.
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the ultimate arena for business. hour after hour of diving deep, touching base, and putting ducks in rows. the only problem with conference calls: eventually they have to end. unless you have the comcast business voiceedge mobile app. it lets you switch seamlessly from your desk phone to your mobile with no interruptions. i've never felt so alive. get the future of phone and the phones are free. comcast business. built for business. take a look at shares of habit restaurants. the stock is up 91% right now. that is 16.45 a share. we'll be speaking with the company's ceo who probably is a very happy man in just a minute. but first, let us go now to what i'm going to call -- why
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not -- the burger capital of america. it's got to be southern california and jane wells. okay, jane. habit burger all over southern california, it's where they started. you've also got, of course, all the big chains, fatburger, n and out burger, five guys. are we at peak burger? five guyk burger? >> well, brian, a survey found that almost all of us eat at least one burger a month. nearly half eat one a week. by the way, this is umami, smells good p $72 billion business, fast, casual better burgers are small, the fastest growing. how many do we need? these chains are targeting millennials, qsr grew up on the food networks and want better ingredients, following pay more. yahoo! finance estimates they have a forward price to earnings ratio of about 40. analysts generally feel the trend is not peaking, though there may be a shakeout.
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>> i think you have seen a few hiccups with the monster in the field, five guys. franchisees sell their units, closed some, even here in new york, which is a big market. there may be some shakeup there. but burgers, again are just so popular for the american consumer. and small, local players will begin to grow in consecutive states. the problem, of course, is that the main ingredient in a burger is beef, which is expensive. some like fatburger are passing through those costs, sarah longier says sophisticated chains know how to manage this red bush outperformed based on best in class growth metrics. who's next? shake shack is the name on everyone's ketchup-dribbled lips, guys. >> i have a shake shack around the corner from me. trust merck i have many coach chu-- ketchup-dribbled lips.
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a very good first day of trade. congratulations, sir. >> thank you very much. >> care to respond, peak burger, a shakeout, something else? >> i kind of agree. i think the burger category is a huge category. it's historically dominated by traditional qsr players. the top four have over 30,000 locations just domestically. and the fast casual, which is an emerging category in better burger just fits lifestyles so much better. people are absolutely looking for fresher, better quality, made the-to-order. >> do you -- we talked about jack in the box yesterday. you are killing it, do you compete with jack in the box or have a different customer, hardee's, carl's, jr., mcdonald's? >> i think we compete with the legacy fast food brains but also taking share from them. but we are also taking share from the other side of the business the more full service category. y do you think you are taking share of them, because you're --
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your option, we have a theory not really the healthy people after things. when i want a big, i want it drick, i want the bacon, mayo. >> not doing it for health reasons. >> we offer a wide range of better burgers but a big part about the habit has always been its broad menu. 40% of what we sell are non-burger items. we have always worked hard to be more gender balanced. and that, we believe, is one of the key div rep she yaters for our brand. >> what's gonna work in years to come? how do you have to evolve the chain? continue to grow? >> great question. i think the american palate is migrating. people are hooking for more full flavors, more variety of foods. and i think those concepts and those brands that, you know, kind of don't always just set trends, but follow trends and evolve slowly and incrementally move with the customer, the ones
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that are most successful. >> you are in four states at the moment. plans to expand to other states? >> we are currently in four states. >> weird ones. >> nah. california, arizona. >> then utah and one location in new jersey. you are kind of like all over the place. >> well, our second location in new jersey is under way, should open early in the -- in 2015 and we have plans to enter the metropolitan washington, d.c., area and florida. >> that's five guys country down there. where they started. put five guys out of business. >> i don't know about that. but we have never worried about who's across the street from us. >> does it -- honestly, a great point. does it matter? if you have got in and out and fat burger and smash bugger, noticed one opens up near you, your sales remain fairly constant? is there enoughburger to go around? >> yeah, there he is plenty of burgers to go around. we have been doing this 46 years. we believe our positioning of being more gender balanced, broader menu, you know, whips at
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the end of the day. okay. well, best of luck. >> thanks very much. >> very ambitious expansion plans, doubling the number of restaurants in the next four years, we will be watching. thanks for having us. >> okay. i can smell the delicious burgers there. >> thank you very much. so now to a very serious note, one involving the cnbc family. jim cramer's dad, ken cramer, died, he was 92, kim was with him. i got to meet mr. cramer, he was warm, he was kind, he was welcoming, he was a true gentleman. jim loved him very much. i doubt jim is watching. but our sympathies to the cramer family. mr. cramer was a great guy and for a lot of people who only know jim by his tv per soap nah and i think mandy can attest to this as well, you know jim is a warm, funny, friendly guy and when you meet his dad, you realize exactly where he got it. so, our sympathies to the cramer family. we will be right back.
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>> this year, something about black friday is twisting everybody's pap test. >> black friday is turn nothing an entire season. >> don't i hope black friday ends? absolutely, i can't stand that day. >> the event is becoming so long. >> signer monday is the worst
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thing i have ever heard. >> that was us the "daily show" trip. last night, over our dissunday for the friday after thanksgiving and the monday after thanksgiving, those words shall not be uttered on this show. >> lewis black going after it. i agreed with a lot of what he had to say, to be honest with you, i don't know lewis black, those words are banned on our show, because we aired it he owes $3. i don't know if he will collect. it will cost you for more thanksgiving this year, as it does every yearful a dinner for ten with all the fixings will cost $49.41. up $47 cents last year, not too bad, considering some of the increases in the meat industry we have seen. some of the other stuff decreased in price, you can have your traditional thanksgiving capping radio and it will cost you, i don't know, whatever you guys use as money in australia. >> um, we bart nerco wallas, okay?
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get straight to kate rogers. what are we doing with wynn? >> wynn resorts, the stock is moving lower on news federal authorities investigating whether the casino operator violated money laundering laws, according to the "wall street journal." the stock right now down about 2 and a third%. >> big news for the end of the show. sure "closing bell" will have more on that developing story. >> that is next. thanks for watching street signs. see you tomorrow. welcome to a very special editing of the "closing bell," i'm kelly evans coming to you live from washington, d.c., as wall street and d.c. politics converging today at in a very big way, bill. kelly, i'm bill griffeth holding down the fort at the new york stock exchange. kelly is quite right, a pretty quiet day again on wall street. i think it's safe to say, kelly that a lot of the action between now and end of the year will be occurring in washington, not on wall st
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